Saturday, March 10, 2012

A True Fiscal Conservative

I often hear people say, “I am socially a Democrat but I’m fiscally a Republican.” To me, however, this sounds highly contradictory.

To be a Democrat is to be socially liberal and fiscally conservative. After all, government’s job is not to control people’s lives, but help people control their own lives. In all my blog posts, I have tried give meaning to this concept. But now it is time to take a look at the six main pillars of the “fiscally conservative” handbook to reverse the notion that “government is not a solution to our problem, government is the problem”.

1. JOBS

When companies like GM and Chrysler were on the verge of bankruptcy, there were no private companies or investors willing to assist these companies. It was only then that the need of government intervention arose. By saving the American auto-industry, the President saved millions of American jobs and created an environment where we can continue to compete globally.

2. FREE MARKET

Let us not forget that businesses -- not government agencies-- are the true engine of job creation. But when they stop hiring or are deregulated to a point that unfairness occurs, we need the government to enact policies that allow the free market to occur. This, in turn, actually strengthens capitalism by providing predictability, stability, and fair competition to the market (which is why we illegalize monopolies) and prevents fraud that hurts companies who play by the rules.

As the President mentioned in his State of the Union, “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

This is why the President passed Wall Street reform to end "too big to fail" bailouts and keep government out of the private-sector. This will also protect consumers, reward managers who play by the rules, and prevent another financial crisis.

3. SMALLER FEDERAL GOVERNMENT

The Emergency Jobs bill provided billions of dollars in needed assistance to help states avoid a budget crunch that would force them to lay off teachers, firefighters, police and other public workers. Thus, it helps strengthen states to make decisions on their own.

The Affordable Care Act also left power to the states by reforming the private health-insurance market to avoid a government-run program and helping these states pay Medicaid payments to doctors. Further, by adding 30million new patients for doctors and customers for insurance companies, costs for states are reduced.

4. INDIVUAL LIBERTY

Keeping the Federal government out of marriage and abortion protects an individual’s freedom to marry who they love and a woman’s right to choose what to do with her body.

5. TAX CUTS

President Obama has passed the largest tax cuts in history with his first stimulus package. The previous record was held by President Bush’s “Jobs and Growth Tax Relief Reconciliation Act of 2003” which amounted to about $230 billion in tax cuts. President Obama’s “American Recovery and Reinvestment Act of 2009”, on the other hand, amounted to about $280 billion in tax cuts. The difference was that the Bush tax cuts were targeted at the wealthiest Americans, whereas the Obama tax cuts were targeted at the middle-class and small businesses.

As President Obama explained in his State of the Union, “Democrats don't begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it's not because they envy the rich. It's because they understand that when I get tax breaks I don't need and the country can't afford, it either adds to the deficit, or somebody else has to make up the difference - like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet.”

Given this choice, President Obama also helped lower taxes for millions of Americans by making healthcare cheaper and more affordable, helping students pay off their college loans, reforming the credit card industry, providing tax incentives to small businesses, extending the payroll tax cuts and unemployment benefits, raising the debt ceiling, and ending the Iraq War.

All these not only cut costs, but also help save billions of dollars while putting more money into people’s pockets. This, in turn, allows them the flexibility to divert their attention from finding access to basic necessities to finding a job.

6. BUSINESSES

According to the Bureau of Labor Statistics, only a small percentage of employers have reported regulation as a reason for laying off workers. Instead, the data shows that the main issues were tied to insufficient demand. Specifically, if no one can afford to buy what a business has to sell, the business will soon fail and jobs will be lost. In this sense, an ordinary middle-class consumer is more of a “job creator” than the average CEO.

This is where we need government. Not to “socialize” every aspect of our society, but simply to help increase consumer demand and provide added assistance to the private sector. The best way to create demand, therefore, is by providing tax breaks for the middle-class. It is by keeping benefits, like Social Security, Medicare, and unemployment benefits that millions of Americans are dependent on. It is by educating our citizens to ensure they are able to compete with the rest of the world.

But I still wonder how someone can be a Democrat without being fiscally conservative?

Long time! I just wanted to drop a few, hopefully constructive, points about this post.

First, I think socially liberal, fiscally conservative persons are 'libertarians' (e.g. Ron Paul). This branch of politics fits more perfectly into what you've described (however they don't want smaller federal government, they seem to want almost NO recognizable federal government).

"Keeping the Federal government out of marriage and abortion protects an individual’s freedom to marry who they love and a woman’s right to choose what to do with her body." This seems like you would be in support of polygamy. Why can't consensual groups of people get married? (The legal problem that arises from taking away the gender restrictions inherent in 'traditional marriage', one can just as easily take away the number restriction - This is a point many pro-gay rights people like myself struggle with). Abortion is an antequated topic that I don't think warrants attention now, despite its morally-charged underpinnings. (I'll just say that the unborn is a human and some people would argue should be afforded the "individual liberty" of our first inalienable right, Life (Liberty and the Pursuit of Happiness).

Your points on Jobs and Free market were juxtaposed in a way that seemed unintentionally comical (government stepping in to save an American industry doesn't seem like free market... free markets would let that industry restructure itself with the collapse of the giants you named and the cropping up of smaller competitive companies). This is not to say that the bailout wasn't okay... just that it was wasn't free-market-esque.

"But when they stop hiring or are deregulated to a point that unfairness occurs, we need the government to enact policies that allow the free market to occur." Even the government's enaction of policies in an industry are contrary to a 'free-market.' (Of course nobody would argue for a completely free market, which is why we have anti-trust acts (sherman), which I think does its job well).

Meh, there's always a lot to talk about in politics and here. But I love reading people's opinion on things. And it's awesome that you've created a forum to further the discussion on this kind of stuff.

In regards to the previous comment posted by Mr. Henry, I think what Ashwani was trying to do is simply make an argument that when Republicans claim Democrats are "not fiscally responsible and advocate for a government takoever of everything in society", they are in fact contradicting themselves.

I think Ashwani makes a very clear and correct argument that in order to truly have limited government that does not hinder ecnomic growth, job creation, free market advancements, and individual liberty, the government must intervene when necessary. "Not to “socialize” every aspect of our society, but simply to help increase consumer demand and provide added assistance to the private sector."

So I think he is saying that we did big government now (when the economy needs it and when unfairness occurs) so that we can have a more limited government influence in the future. He is also making a point that Republicans don't seem to know what they are talking about when they campaign against Democrats.

Fair points. But I want to make clear that I wasn't disputing the claim that Democrats can be fiscally responsible. Simply put, big government (in the short term) is still big government. One cannot say big government is short term when these federal programs will endure perpetually (e.g. Health Care). That claim would be plainly, false. Again, this is not speaking to the substance of the Health Care Act, but to the claim that such a vast government program can bee short term or 'limited.'

I don't disagree that a government should intervene when necessary. I point you back to my discussion about how I approve of Anti-trust and fair competition. All I said was that free-market principles and the government funding of the private automobile industry is inherently incompatible (this is an instance, not of the government trying to further competition, but to SAVE an existing monopoly, instead of letting the market appropriately engage in 'trust-busting,' if you will.

Again, Mr/Ms. JH, I wasn't speaking to the substance of the administration's actions so much as for the theoretical basis upon which the claims made about them stands.

In writing this blog post (and all my other blog posts for that matter), I was merely justifying my belief that government should work FOR the people, by using the Republican viewpoint of small government and fiscal responsibility.

As I argue in this blog post, Democrats only favor big government in order to accomplish the goals that Republicans actually argue for: a strong capitalistic market, growth in small businesses, reduction in spending, and long-term economic growth. The way to accomplish these goals is by having government step in when it needs to.

When this does not happen and government does not step in when it needs to (as Republicans argue for), it actually hurts capitalism, hinders individual liberties, encourages monopolies, and creates a need for a much larger government in the future, contrary to the principles of a free market.

Therefore, I do not feel that a government bailout or stimulus contradicts my argument. These actions only did what Republicans hope to accomplish.